Shrinath Mithanthaya of Motilal Oswal Securities is of the view that NIIT has target of Rs 450.
Mithanthaya told CNBC-TV18, "NIIT is a good play on the Indian tech industry and there is a clear mismatch in the demand supply of IT professionals. So by far the market leader in Indian IT education company, we feel NIIT is well placed. It has a network of about 450 franchises cum owned kind of centres. It's raising strategic acquisition of Element K abroad, is EPS accretive in short-term and has significant opportunity in the long-term in terms of significant cost reductions. But at the same time some segments of the market are truly over optimistic about the prospects of the company which we are not, I mean we have factored in the other side as well in terms of possible restructuring cost at Element K, also its new initiatives in terms of Imperia and the institute of banking and finance which has started in joint venture with ICICI Bank . So that will be some market development cost there. So we have factored in all that to arrive at a healthy earnings growth and improvement in ROE from hereon. So we have target price of about Rs 480 in about 12-15 months. We are valuing it at 15 times FY08 EPS of about 32.5."
